STRATEGY FORMULATION and IMPLEMENTATION.ppt

STRATEGY FORMULATION and IMPLEMENTATION,MANAGEMENT 6th Ed.By:Richard Daft,Prepared by:GREGAR DONAVEN E.VALDEHUEZA,MBALourdes College Instructor,Learning Objectives,Define the components of strategic managementDescribe the strategic planning process and SWOT analysisUnderstand Grand Strategies for domestic and international operationsDefine corporate-level strategies and explain the portfolio approachDescribe business-level strategies,including Porters competitive forces and strategies and partnership strategiesExplain the major considerations in formulating functional strategiesEnumerate the organizational dimensions used for implementing strategy,What is Strategic Management?,Strategic ManagementThe set of decisions and actions used to formulate and implement strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals.,Grand Strategy,The general plan of major action by which an organization intends to achieve its long-term goals.,Three general categories:Growth can be promoted internally by investing in expansion or externally by acquiring additional business divisions.Stability(pause strategy)that the organization wants to remain the same size or grow slowly and in a controlled fashion.Retrenchment that the organization goes through period of forced decline by either shrinking current business units or selling off or liquidating entire business.,Global Strategy,a separate grand strategy as the focus of global business.,Three global strategies:Globalization the standardization of product design and advertising strategies throughout the world.Multidomestic strategy the modification of product design and advertising strategies to suit the specific needs of individual countries.Transnational strategy a strategy that combines global coordination to attain efficiency with flexibility to meet specific needs in various countries.,Purpose of Strategy,Choosing how the organization will be different.,StrategyThe plan of action that prescribes resource allocation and other activities for dealing with the environment and helping the organization attain its goals.,To remain competitive,companies develop strategies that focus on:Core competenceA business activity that an organization does particularly well in comparison to competitors.SynergyThe condition that exists when the organizations parts interact to produce a joint effect that is greater than the sum of the parts acting alone.Value CreationThe heart of strategy.Value can be defined as the combination of benefits received and costs paid by the customers.,Levels of Strategy,Corporate-Level StrategyThe level of strategy concerned with the question,“What business are we in?”.Pertains to the organization as a whole and the combination of business units and product lines that make it up.Business-Level StrategyThe level of strategy concerned with the question,“How do we compete?”.Pertains to each business unit or product line within the organization.Functional-Level StrategyThe level of strategy concerned with the question,“How do we support the business-level strategy?”.Pertains to all of the organizations major departments.,Three Levels of Strategy in Organization,Strategy Formulation Versus Implementation,Strategy FormulationThe stage of strategic management that involves the planning and decision making that lead to the establishment of the organizations goals and of a specific strategic plan.Strategy ImplementationThe stage of strategic management that involves the use of managerial and organizational tools to direct resources toward achieving strategic outcomes.,The Strategic Management Process,Implement Strategy via Changes in:Leadership/Culture Structure Human Resources Information and Control System,Situation Analysis,Analysis of the strengths,weaknesses,opportunities,and threats(SWOT)that affect organizational performance.,StrengthsPositive internal characteristics that the organization can exploit to achieve its strategic performance goals.WeaknessesInternal characteristics that might inhibit or restrict the organizations performance.OpportunitiesCharacteristics of the external environment that have the potential to help the organization achieve or exceed its strategic goals.ThreatsCharacteristics of the external environment that may prevent the organization from achieving its strategic goals.,Formulating Corporate-Level Strategy,Portfolio Strategy,A type of corporate-level strategy that pertains to the organizations mix of SBUs and product lines that fit together in such a way as to provide the corporation with synergy and competitive advantage.Strategic Business Unit(SBU)A division of the organization that has a unique business mission,product line,competitors,and markets relative to other SBUs in the same corporation.,The BCG Matrix,A concept developed by the Boston Consulting Group that evaluates SBUs with respect to the dimension of business growth rate and market share.,Four Alternative Positions:Question MarksThe business unit has low market share compared to competitors,however it is doing business in high-growth market.StarsThe business has high market share compared to competitors and it is doing business in high-growth market.Cash CowsThe market is not very attractive low market growth rate,however the business has high market share compared to competitors.DogsThis business has low market share and operates in low-growth market.,Formulating Business-Level Strategy,it is a strategy formulation within the strategic business unit in which the concern is how to compete.the same three generic strategies(growth,stability,and retrenchment)apply at the business level,but they are accomplished through competitive actions rather than the acquisition or divestment of business divisions.,Porters Five Competitive Forces,Competitive Strategies,Differentiationa type of competitive strategy with which the organization seeks to distinguish its products or services from competitors.Cost LeadershipA type of competitive strategy with which the organization aggressively seeks efficient facilities,cuts costs,and employs tight cost controls to be more efficient than competitors.FocusA type of competitive strategy that emphasizes concentration on a specific regional market or buyer group.,Partnership Strategies,Formulating Functional-Level Strategy,the action plans adopted by major departments to support the execution of business-level strategy.major organizational functions include marketing,production,finance,human resources,and research&development.,Strategy Implementation and Control,Implementation is the final step in the strategic management process and it is how strategy put into action.Some people argue that strategy implementation is the most difficult and important part of strategic management.,Tools for Putting Strategy into Action,Implementing Global Strategies,In the international arena,flexibility and superb communication emerge as mandatory leadership skills.Structural design must merge successfully with foreign cultures as well as link foreign operations to the home country.Information and control systems must fit the needs and incentives within local cultures.Recruitment,training,transfer,promotion,and layoff of international human resources create array of problems not confronted from other countries such as labor laws,guaranteed jobs,and cultural traditions of keeping unproductive employees on the job.,THE END,Any clarification?HAVE A NICE DAY!,